Sleep-disorder tech maker gets $2.5M

Dymedix Diagnostics Inc., which makes sensors used to diagnose sleep disorders, has raised $2.5 million in capital from angel investors.

The Shoreview-based firm will use the funds to ramp up sales and marketing, said Evan Johnston, the business’ interim chief operating officer. Company officials hope to ultimately raise about $4 million.

“We’ve never had the capital to really do sales and marketing properly to capture enough market share,” he said.

The company initially built a direct sales force. It now plans to expand its business via partnerships with manufacturers of other sleep-diagnostics products.

Dymedix’s product is a thin sensor that’s placed on a patient’s face during sleep studies, which health providers perform to diagnose sleep apnea and other disorders. The company’s product monitors both a patient’s nasal and oral airflow.

The market for such sensors is competitive, but Dymedix boasts that its product works faster and produces more accurate results than other technologies, Johnston said. He declined to disclose the company’s annual sales.

Dymedix Diagnostics’ sensor has been on the market for a dozen years, but it was originally sold by Dymedix Corp. That company spun Dymedix Diagnostics off as a separate business last year. Company officials hoped the move would make it easier for the more-focused business to raise money.

Dymedix Corp., meanwhile, is continuing work on a separate medical device that would treat sleep apnea. Both companies share 10 full-time employees.

Raising money has been a challenge for Dymedix Diagnostics, and most of the capital it raised came from previous Dymedix Corp. investors, Johnston said.

“It’s really, really tough. It takes diligence and being at the right place in the right time.”

The market for sleep-disorder diagnostic products has grown in recent years. A 2010 Frost & Sullivan market research report noted that sales of such devices in the United States hit $1.35 billion in 2008. The firm said rising rates of obesity, which can cause sleep apnea, is one factor that’s driving demand for sleep studies.